观点

Hungarian government bond yields have also absorbed the deterioration in global sentiment relatively well, supported by expectations of fiscal consolidation.

There has been a similar modest retracement in bond market volatility as well and if bond yields have settled around a new equilibrium then we could see volatility come down further in both rates and FX.

Rising bond yields end debt service reprieve in CanadaJob losses concentrated among young Canadians in SeptemberCanadian industry data to point to a modest GDP rebound in August RBC’s consumer spending tracking report uses RBC Data & Analytics’ proprietary database of anonymized card transactions by Canadian clients.

On the flip side, political compromise could keep federal spending and borrowing elevated, adding to pressure on Treasury yields.

Extra borrowing could add to pressure on Treasury yields.

Credit Market Updates Market Commentary: • The SGD SORA OIS curve traded lower yesterday; shorter tenors traded flat to 1bps lower, belly tenors traded 1-2bps lower, and 10Y tenor traded 2bps lower.

• Earnings beats could help sentiment recover, but rising bond yields and cautious management guidance remain risks.

Bank stocks have come under pressure as rising Treasury yields have raised concerns about borrowing costs, loan demand and potential credit losses.

Bilateral meetings or comments from currency officials, including Treasury Secretary Scott Bessent and Finance Minister Satsuki Katayama, could generate FX -related headlines, so headline risk will also warrant attention.

Higher bond yields, export restrictions, Taiwan-related geopolitical risks and concerns about AI spending returns could continue to weigh on valuations.

If AI can help a company understand where liquidity is needed, digital infrastructure can allow that liquidity to be mobilised more quickly; and if programmability helps the infrastructure to execute what should happen automatically and under defined controls, then treasury moves closer to operating in real time.

The future of treasury will therefore be defined less by individual technologies than by how well the pieces work together: choosing the right form of money for the right purpose, using intelligence to make better decisions and moving liquidity efficiently without sacrificing control.

If that fuels concerns that the BoJ is falling behind the curve, the 10-year JGB yield could trade with an upward bias.

If Diet deliberations fail to identify specific alternative funding sources, fiscal policy concerns could put gradual upward pressure on the 10-year yield.

Conversely, the 10-year Japanese yield could struggle to rise any further if Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama continue to emphasize fiscal discipline or signal a shift away from reflationary policy, as they have done last week, in response to market developments.

A further increase in French government bond yields due to fiscal and political concerns could also boost demand for safe-haven assets and lower the 10-year UST yield, which would help to limit any rise in the Japanese equivalent.

As a result, we expect the 10-year JGB yield to remain at the elevated level of around 3% (Graph 2).

So that all means the broader context is really key here, and the bigger swing factor will be the reason behind those rising bond yields.

The rupiah has weakened above IDR18,000/USD, while our existing framework points to a combination of higher US yields, weaker external balances from elevated oil prices and a tougher trade-off for Bank Indonesia.

Little action has been seen so far today with the dollar index, euro and yen trading near unchanged while the Australian dollar is the clear G10 outperformer this morning, up 0.4% after Friday's risk-on session, while the Canadian dollar also firmed, USDCAD down 0.14%, with higher crude prices cited as support.

Dhar said the late rally was attributed to two events: Saudi Arabia intercepting a missile heading for the Red Sea port of Yanbu, and a Ukrainian drone striking a main unit of a large Russian oil refinery.

Oil has some buffers, including pipelines that bypass trouble spots, rising supply outside the Middle East and lower Chinese imports.

A deal that looks like a ceasefire should see Brent return to $US85-100 a barrel, while a deal that lifts the US naval blockade on Iran should see it fall to $US70-85.

That means Brent "may stay above $US100 a barrel in the short term", Dhar said.

But either side could overplay its hand, leaving oil and fuel stocks running down in some parts of the world.

Dhar said that could push Brent towards $US150 a barrel; a level high enough to force lower demand in emerging and developing Asian economies.

Growth will probably weaken further toward year-end as persistently high oil and gas prices push inflation above 4%, potentially prompt an interest-rate hike, and squeeze households.

Still, he flagged that higher oil prices are “having a positive effect on growth” and repeated a bias toward raising their inflation forecast in the upcoming October MPR which he has previously indicated.

That forecast has largely played out, with oil averaging $92 between 1 July and 15 October.

Moreover, key US allies in the Gulf, Saudi Arabia and the UAE, are coping financially, with Saudi oil revenues roughly flat and UAE revenues higher than in 2025 (Figure 2).

Across all three scenarios, energy supplies face increasing disruption risks, suggesting oil prices should remain elevated in the absence of conflict resolution.

Markets also appear to assume that oil prices will fall significantly once the war ends.

Alternative supply routes face the risk of missile attacks, inventory drawdowns are reaching their limits, and speculation is growing that China could resume higher oil imports.

• We are nearer the endgame, with another oil price spike expected before de-escalation sets in.

This implies not only higher oil prices, but also higher short-term rates than previously priced and a stronger near-term US dollar.

As expected, energy inflation accelerated as gasoline and furnace oil prices rose from August, while food inflation continued to moderate.

Brent futures are trading lower from the open but have held onto levels above USD 105/b.